JetBlue CEO: Why not London?!?

It is no secret that JetBlue is considering service to Europe, powered by the Airbus A321LR. The latest indicator of such came in comments from CEO Robin Hayes during a “Plane Talk” employee briefing session the company hosted as a video and shared online last week. In that conversation Hayes (and other executives) is asked what destination would be his first choice, assuming no barriers. His response was “London, hands down.” (~25:50 on the video below)

When asked to expand on “Why London?” his response was an animated “Why not London?!?” He continued from there:

Once we open Minneapolis London is the largest market that we don’t serve [from Boston]. And Dublin is up there, too. Ultimately for us to build out and be successful we have to serve this market. Clearly we can’t fly to London with our current equipment. That’s why we’re looking at the 321LR. The earliest we can do that is late 2019. That will be here in a heartbeat.

This is not new reasoning, of course. Hayes and other executives have spoken about the seemingly bottomless demand for service between London and the carrier’s focus cities in Boston and New York City. And JetBlue continues to believe that its Mint service can deliver a disruptive product by not competing solely for the lowest fare traveler like Norwegian and other long-haul LCCs focus on. Rather, the company wants to carry premium traffic across the Atlantic, just at a discount to where the current carriers price such today.

That is a bold position and the existing carriers are no strange to premium upstarts in their space. They have a habit of defending that market aggressively. One significant difference this time around is that JetBlue is not a brand new carrier launching the service, but an established player. It has other routes and revenue to help deliver some stability in its operations and to shield it from the inevitable fare wars that accompany such service. It also has an established (and sometimes rabidly loyal) customer base to help support the new routes when (technically “if” I suppose) they launch.

Hayes also notes that the carrier faces similar challenges in the domestic markets:

There are four large airlines out there with deep pockets and a lot of power. And they want us gone. We are a 5% player and…they want us gone. We see Delta growing in Boston. We see Southwest growing in Fort Lauderdale. We see United on the west coast growing against Alaska [Airlines]. The large airlines still have a mentality that they want to put the small airlines down. To win we have to be a team, we have to come together, offer our customers better service.

Expanding into the international market against similar (if not stronger) competition is a tough go.

Cabin Crew Challenges

The timing of this “Plane Talk” session lined up with the opening of voting for cabin crew on whether to unionize or not. Watching the full hour-long broadcast it is clear that there is more than a little bit of lobbying happening around all of the topics, as one should expect from management in this scenario. One of the topics that received significant airtime was issues around the company’s crew management software solution.

Joanna Geraghty, JetBlue’s Executive Vice President Customer Experience, spoke to some of the issues on that front, especially around the technology involved in implementing a new solution. A system upgrade was purchased but the execution on that is not going so well. Geraghty mentions that it is “tracking a year behind” already and that it will be several years before the new system is implemented. She also notes that one of the biggest challenges is the complexity and flexibility of JetBlue’s crew rules; those options aren’t supported in any off-the-shelf solution.

In the meantime the old system is seeing some small improvements and the company is providing manual workarounds for many new functions to try to bridge the gap. But a delay of this magnitude on a system so crucial to crew satisfaction has to be rough for the company to handle.

Well Paul you are #1 on badges I’m a lowly mid 200’s. With anything there definitely is a cult following for JetBlue. Even through cancellations and sometimes long delays. We’re tried and true to JetBlue. Thank you Seth for your great reporting as usual

Flying to London is very expensive. How would Jetblue get the slots for LHR or LGW? Will Emirates give them one of theirs?
I would love to see Jetblue attempt to make this work but they’d have a few things going against them.
They are unknown in Europe
They have zero slots and acquiring them would be difficult
They would have zero connections on the other side
No lounge access which is important to business travelers
And of course setting up shop in an expensive city
After that then the competition would begin. BOS-LON: 4 BA, 1 DL, 1 VS, 1 DY

That is reason behind the codesharing agreements. In fact, at some point they wanted to change it to JB but Dave said it would be too expensive and the B6 is what people have gotten to know. (Thanks to the awesome Mr Neelman). The philosophy behind it is FREE MARKETING. Its the cheapest and best way to get the name out there and make people curious and look up for the airline and it’s services. A third of JetBlue’s income was thanks to interline agreements, and thats when Dave Barger was still CEO. Today that number might be higher. It makes total sense to grow elsewhere, where people are willing to spend the money. I’d like to see how it’s going to play out with the crew though. The pilots are in process of their first contract, flight attendants are unionizing soon and after that is ground crew. If they need to make a move they have to do it now before a contract is made. That way the financial status of the airline is considered when the contract is negotiated. This would impact the contract negotiations as of what the airline can provide for pay and other scheduling accommodations. B6 now have the “flexibility” to manage crew policies because they have not enter into any agreement that might pull more money for payroll than what its pulling now.

There are other airports in the London area besides LHR and LGW. And, as you note, no real connecting flow so Stansted or Luton might work (though I’m not sure about the runway length at Luton for the A321LR loaded up for a westbound TATL). Lounge access is solved through partners or even building their own if they want to. The space certainly exists in BOS, for example, and the company has long acknowledged that the premium ground experience is lacking.

There is definitely competition and that’s the really hard part for JetBlue to face. It believes the Mint premium experience can extend well into that market, slashing premium prices to a level that will still be profitable to JetBlue but that will hurt the other carriers. That’s a tricky play, but so far on the transcon Mint services it seems to be working.

I’m rather surprised that JetBlue hasn’t broached the transborder market yet. Yes, there is a lot of competition, some of it LCC. But there is also a decent volume of traffic and the shorter stage lengths could work to the company’s favor, especially with E90s from Boston to Toronto or Montreal. Then again, London is a bigger market from Boston than anything in Canada, so maybe it makes sense to wait on the transborder stuff. Just because the flights are shorter doesn’t mean they’re necessarily less financially risky to the company.

From what has been gathered, b6 is not looking into any routes going to Canada in the near future because the fees are incredibly high. Most customers of theirs who go to Canada fly into buffalo and they cross that way. Cheaper for b6, cheaper for the money frugal customer.

The passengers taxes/fees are absolutely high in Canada. But they’re also higher in London. The Buffalo(Toronto) or Burlington(Montreal) and drive crowds are heavily skewed towards very price-sensitive leisure travel. As JetBlue continues to push into the business travel segment, especially from Boston, it has to accept some of those challenges and deliver for its customers.

[…] JetBlue CEO: Why Not London? Robin Hayes, a Brit who leads JetBlue, clearly doesn’t want to catch anyone by surprise. He has been saying for years that he’d like JetBlue to fly to Europe, with London a priority. JetBlue would need to convert aircraft orders to the A321LR to make it happen, but it sounds like the airline will do it. “Ultimately for us to build out and be successful we have to serve this market,” he told employees. Blogger Seth Miller has the story. […]